APN News & Media had $33 million wiped off its market value after its shares plunged to new lows following a profit warning.
In a statement released after the market closed on Thursday, APN said it expected net profit before exceptional items for calendar 2012 to come in between $51 million and $54 million.
If the result prints in line with company guidance, it would represent a decline of up to 34 per cent from the $78 million underlying net profit for 2011.
APN, which owns regional newspapers and radio stations across Australia and New Zealand, digital assets and outdoor advertising joint-ventures, fell sharply when the market opened on Friday.
The stock closed five cents, or 15.9 per cent, lower at a new record low of 26.5 cents.
In percentage terms, APN was the worst-performing stock on the S&P/ASX200.
APN had warned investors that its publishing revenue was down 10 per cent since June, although cost savings had offset some of the decline.
The company said its publishing units had achieved $25 million in cost savings in 2012, with a further $25 million saving expected next year.
APN chief executive Neil Chenoweth said conditions in the second half of 2012 were more challenging than the first six months, with advertising bookings extremely short.
The stark earnings warning prompted analysts to downgrade the stock.
Morningstar Equities Research analyst Michael Higgins has placed the stock under review, lowered his estimates of full year profit and raised the possibility APN may have to write down the value of its newspapers.
"We don't expect conditions to improve materially in the short term," Mr Higgins said in a note to clients.
CIMB analysts Fraser McLeish and Alan Stewart also downgraded the stock to neutral, from outperform.
"We believe that both FXJ (Fairfax Media) and SWM (Seven West Media) offer less risky ways to play the sector at the current time," the analysts said.
BBY client adviser Adrian Leppinus said most media stocks had been struggling recently as market players looked for less volatile sectors to invest in.
"Earnings certainty is what the big investors have been piling into recently and no one really wants anything that is outside that," Mr Leppinus said.
"Anyone that is missing estimates is getting sold off considerably."